No-deal Brexit damage ‘will be huge and it will be for all of us,’ former Greek leader says

Former Greek Prime Minister Alexis Tsipras warned on the contagion effects of a no-deal Brexit, saying that stronger economies in the EU were at a greater risk due to their close relationship with the U.K.

Speaking to CNBC’s Steve Sedgwick at the Ambrosetti Forum in Cernobbio, Italy, he said that a British exit without a formal deal should be avoided at all costs.

“I think the damage will be huge and it will be for all of us. Of course for the U.K. and the U.K. citizens first of all, but not only for them,” he said Saturday.

“I think the huge damage will be if there is a no-deal Brexit for all the European member states and especially for the strong states, their economies are very connected with the U.K. economy.”

His words come after a pivotal week in British politics that has seen the ruling Conservative Party lose its majority in the House of Commons and new Prime Minister Boris Johnson suffer four significant parliamentary defeats at the hands of opposition lawmakers. A law forcing Johnson to ask for another extension to the October 31 Brexit deadline is due to be signed off on Monday and the U.K. leader is set to fail again in his bid to call an early election. Johnson has repeatedly said the U.K. must leave the EU by the current deadline “do or die, come what may” even if that meant leaving without a deal in place.

A no-deal Brexit — where the U.K. has to trade by WTO rules with no transition period in place — is seen as economically damaging by many. A report this week said the imposition of tariff and non-tariff barriers between Britain and the EU will be a major shock to the economy, while sterling’s predicted decline will drive up inflation and reduce real wages.

Tsipras, who became Greece’s leader in 2015 before being swept aside by New Democracy’s Kyriakos Mitsotakis at elections earlier this year, said that Brexit could be especially negative for the U.K. working classes and the country’s most vulnerable if there is no radical change in direction with the withdrawal.

Tsipras and his Syriza party came to power with a promise of confronting the EU and ending austerity in a country that, since 2010, had been at the mercy of international creditors. But he disagreed that his style of politics had any similarities with Johnson’s populist playbook and his recent hard line on Brexit.

“Populism is not to fight for the rights of your people, it’s not to fight in order to find honest agreement with your partners — this is democracy, this is not populism. But populism is to sink your people in hate, to divide people and to fight without a goal for realistic decisions,” he told CNBC.

Source: CNBC